KLA-Tencor vote coming on shortening board members' terms

KLA-Tencor Corp.'s proxy card, filed with regulators on Thursday afternoon, asks shareholders to prepare to vote on "declassification" of the board of directors -- which means they'd be up for election every year, instead of having staggered three year terms.

Until now, the Milpitas company's (NASDAQ: KLAC) board has been "classified," with three groups of board members elected to three year terms. Directors can only be removed for cause; they can't be turfed out by shareholders during that three year period.

The classified board structure has been in place since 1989, since it was adopted by predecessor company KLA Instruments Corp.

"Proponents of a classified board structure believe it provides increased board stability, improved long-term planning and an enhanced ability to protect stockholder value and resist abusive tactics in a potential hostile takeover," the company said in its proxy card.

However, the board itself approved the proposed change on Aug. 2, as directors recognize times have changed.

KLA's board realizes that "corporate standards have evolved and that many investors and commentators now believe that the election of directors is the primary means for stockholders to influence corporate governance policies."

Members of KLA's board are now divided into three classes, with one group up for election at each annual meeting.

This would continue until 2015, if the proposed amendment passes. The 2015 meeting would be the first one in which every director was voted on for a one year term.

Directors elected this year at the meeting on Nov. 7 will serve until 2015, and those elected last year will serve until 2014. So some directors would be elected for just one year, but 2015 would be the first time all directors faced the vote for one year terms.

KLA's board met seven times in the fiscal year that ended June. Four directors are up for election this time -- Robert Akins (former CEO of Cymer Inc.), Robert Bond (a former Rational Software Corp. and Hewlett-Packard Co. executive), Kiran Patel (an Intuit Inc. executive) and David Wang (a retired Boeing executive). Those serving until 2014 are Robert Calderoni (CEO of Ariba Inc.), John Dickson (a former Alcatel-Lucent executive) and Kevin Kennedy (CEO of Avaya Inc.).